Shu-Tao Lin v. McDonnell Douglas Corp.

574 F. Supp. 1407, 14 Fed. R. Serv. 887
CourtDistrict Court, S.D. New York
DecidedSeptember 28, 1983
Docket79 Civ. 3195 (RWS)
StatusPublished
Cited by13 cases

This text of 574 F. Supp. 1407 (Shu-Tao Lin v. McDonnell Douglas Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shu-Tao Lin v. McDonnell Douglas Corp., 574 F. Supp. 1407, 14 Fed. R. Serv. 887 (S.D.N.Y. 1983).

Opinion

OPINION

SWEET, District Judge.

Defendants McDonnell Douglas Corporation (“McDonnell”) and American Airlines, Inc. (“American”) have moved pursuant to Rule 59 Fed.R.Civ.P. to set aside the jury verdict awarding damages of $7,000,000 for pecuniary loss and $10,000 for pain and suffering arising out of the wrongful death of Shu-Ren Lin, M.D. (“Dr. Lin”), in the Chicago crash of an American McDonnell DC-10 on May 25, 1979. The action was brought by Shu-Tao H. Lin (“Lin”), his administrator on behalf of the estate and Dr. Lin’s survivors, his wife and four children. For the reasons set forth below, the motion is granted because the parties did not receive a fair trial and because the verdict was excessive, as a consequence of which the action will be retried in the fall of 1983 unless plaintiff agrees to a remittitur in the amount of $4,274,500 dollars. The court denies, for the reasons given below, defendants’ motion for judgment notwithstanding the verdict on the issue of conscious pain and suffering.

Prior Proceedings

The parties are, of course, completely familiar with the history of this action — its initiation on June 19, 1979, its transfer on August 13, 1979 to the Northern District of Illinois for coordinated and consolidated pretrial proceedings, its return to this district on November 18, 1982 for trial on the issues of damages, the parties having entered a no contest stipulation on the issue of liability, and the trial which commenced on April 1, 1983 and terminated on May 6, 1983 with a verdict for the plaintiff, the defendants having introduced no evidence.

Because of errors committed during the trial with respect to the admission of evidence, principally certain expert testimony, the inadequacies of the pretrial discovery, and unforeseen prejudicial events, American and McDonnell did not receive a fair trial. Also as a result, the verdict of the jury was excessive, and a remittitur would be appropriate. If the proposed remittitur is unacceptable, retrial will be had in accordance with the procedures described below.

Fair Trial

A. Errors Concerning Expert Testimony

The core issue to be tried was the loss of income which could properly be attributed to Dr. Lin’s wrongful death. At the time of his death, Dr. Lin was a tenured Associate Professor at the University of Rochester (“University”) in the radiology department, and a neuroradiologist qualified in the use of the highly-specialized Computerized Axial Tomography (“CAT”) scan, in which a series of x-rays are taken on various planes and the results are computerized to produce, in effect three-dimensional analysis. Dr. Lin had written in this field and was an acknowledged expert. At the time of his death, a book on neuroradiology *1410 which Dr. Lin co-authored with Dr. Kyuhwan Francis Lee was about to be published.

Dr. Lin’s earnings at the University ranged from $38,000 in 1974 to $56,000 in 1978. In 1979, the year of his death, Dr. Lin earned approximately $40,000 in salary from the University and received certain other payments from the University. The nature of these additional payments was not explained by any witness with personal knowledge though they were reported as part of the fiduciary return for 1979. The testimony also revealed that in addition to his home in Rochester, Dr. Lin had invested in real property in Maryland and Florida, though the property had generated no income. He had also invested in Earl’s Liquor Store in Fairport, New York, a neighboring community, and in 1979 the liquor store had returned a small profit.

Upon this factual base, the plaintiff’s expert economist, Dr. Edmund Mantell, estimated that the income lost by Mrs. Lin and her four children because of Dr. Lin’s death had a present discounted value of $41 million, the estimated income for the last year of Dr. Lin’s projected working life being $9.8 million. The key to this computation was Dr. Mantell’s assumption that Dr. Lin’s income would have increased by 25% per year for the first four years after his death, and by slowly declining percentages in later years. Dr. Mantell derived the 25% figure by computing the compound average rate of growth of Dr. Lin's earnings from 1971 to 1979. The figure Dr. Mantell used for 1979 was $125,000, an extrapolation from Dr. Lin’s actual earnings during the almost five months of that year during which Dr. Lin was alive. The figure was a substantial rise from Dr. Lin’s 1978 reported earnings of $56,000.

Dr. Mantell was qualified to make computer projections and to testify. However, those projections require a stronger basis than the simple arithmetic computations he employed. Although the extrapolation for 1979 appears to have relied on non-salary payments from the University to Dr. Lin, plaintiff brought in no witness with personal knowledge to testify as to the nature of these non-salary earnings, or as to Dr. Lin’s salary at the time of his death. The computation was based only on unclear tax records. For these reasons, the straight line extrapolation for 1979 was without foundation. Similarly, there was no basis, stated or implied, that justified the assumption of annual income increases of 25% or slightly lower for many years. No studies, empirical data, or comparison with other university salary structures were offered to justify this projection.

These gross income estimates were then reduced by a federal tax rate of 13%, which had been Dr. Lin’s average effective tax rate in the years before his death. No foundation was established for the use of such a rate, which was based on a period when Dr. Lin had a lower income and more deductions for dependents than he would have had in the years to come. By using this constant 13% figure, Dr. Mantell implicitly states, for example, that the effective tax rate on Dr. Lin’s 1978 income of $56,000 and that on his projected income in 2007 of $9.8 million would be identical. No standardized tables, accepted formulae or other evidence were employed to justify this constant rate.

The resulting post-tax figure was further reduced by estimates of what would have been Dr. Lin’s personal consumption. The estimates were based on studies published by the United States Bureau of Labor Statistics and other books and articles. Dr. Mantell testified that he did not include estimates of state taxes and fringe benefits because the two were mutually off-setting. He testified that he considered 10% to be the appropriate rate for state taxes on earned income and that he had conducted research on, and was aware of, fringe benefit packages which led him to the conclusion that a fringe benefit package for a university such as the University of Rochester would approximate 12 to 14% of earnings.

Present value discounting of the stream of Dr. Lin’s lost earnings was omitted on the premise that inflation over the lifetime of Dr. Lin would offset it. Dr. Mantell’s *1411 calculations are thus based on the unlikely-assumption that the real rate of return on investments in the United States will be zero for the next 25 years. No empirical, research or other testimonial basis was offered to justify this assumption. See Doca v. Marina Mercante Nicaraguense, SA., 634 F.2d 30

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Bluebook (online)
574 F. Supp. 1407, 14 Fed. R. Serv. 887, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shu-tao-lin-v-mcdonnell-douglas-corp-nysd-1983.